Cloudy future for the channel?

Judging by the all the hype surrounding cloud computing, many parts of the industry are calling it a done deal. Behemoths like Microsoft and Google are confidently predicting that in the future, businesses and personnel users alike will rely on applications accessed via the internet or from private data networks.
Behind the usual array of business benefits including costs reduction and scalability, one key driver is profit. Dealing direct and cutting out the middleman, or channel partners, could substantially increase revenue.

If we are all heading for a future dominated by cloud computing, it would be best to make sure we are all talking about the same thing. One vendor’s idea of cloud is another rival’s definition of a managed service. In broad terms, the cloud computing industry is split along three primary lines. These are software, infrastructure and platform. As there is no industry-agreed definition or standard for cloud computing, the easiest way to look at things is by what it offers and who will use it.

Software Cloud / Software as a Service (SaaS)
A software cloud is ready-made for software delivery or Software as a Service (SaaS). There are more than a hundred providers and the number is rising fast. In this category, the most recognisable are Salesforce.com, Google Apps and WebEx. In addition, almost every other major IT vendor including Microsoft, Oracle and Symantec is pushing some of its existing software product out as a service model via the cloud.

Normally, the software application is delivered inside a browser interface. This could be as a java, flash or some other web-based technology. However, thin client technology like Citrix Presentation Server or Microsoft Windows Terminal, which just presents a visual representation of an application running remotely, could also be classed in to this category.

The advantages by claimed SaaS are rapid implementation and less capital expenditure as the servers are already up and running, configured with software and just waiting for you to add your users and data. However, total cost of ownership over several years is often downplayed. Trying to find a definitive impartial cost analysis of running applications servers yourself versus a per-month, per-user cloud option is nigh on impossible.

For the channel there are a number of concerns. In this cloud-centric future, with Microsoft and Google owning all the hardware, software delivery and billing – what role is there for the channel? Also, if the end customer only needs a fast internet connection, where is the value-add for the channel?

Well, the reality is that businesses don’t just run on one über application. So trying to get the different cloud applications to work together can be very difficult. Even if there are applications in the cloud covering every conceivable industry sector, some customers will want to keep critical applications in-house. This “old fashioned” approach maybe for security, reliability, or due to deep customisation or simply due to performance as some application simply work better outside of a cloud environment.

Even with widespread adoption of cloud computing, the entire underlying infrastructure required to supply applications to a member of staff sat at a desk or call centre still needs real channel partners to implement and support real local hardware and software. This could include data networks, local file and print servers as well as any ongoing maintenance and support. In a world where applications come from clouds, the performance, reliance and security of the transportation layer is even more critical.

Infrastructure Cloud, Infrastructure as a Service (IaaS), Utility Computing, Virtual Private Datacentre, Grid Computing
Well if the big fish is application delivery, then next up the cloud technology charts is the infrastructure. The proposition of an Infrastructure cloud is thus: Instead of customers buying servers, software, datacentre space and network equipment, clients instead buy these resources as a fully outsourced service. The service is typically billed on a utility computing model, like electricity consumption, with end users charged by how much they consume. The service provider just looks after the physical infrastructure and gives them some tools to build the configuration.

Within this category are companies like Amazon EC2, 3tera, DAAS.com, GoGrid and RightScale. For these vendors, the cloud is more like a big box of Lego – how you chose to arrange the pieces and what you want to make is up to you. In many cases, this could be the third party you choose to build your infrastructure cloud requirements on your behalf.

Infrastructure clouds are similar to web hosting but offer better flexibility with the ability for clients to create a true virtual datacentre. For end users, there is lower CAPEX and the ability to scale quickly while costs are somewhat easier to compare as the hardware elements of gigahertz of processing power, terabytes of storage and Mbps of connectivity are quantifiable. Potential downsides include a lack of control over exact hardware specifications and restriction on customisation at a physical level as the hardware is effectively rented and never owned.

So even if fewer businesses buy and run their own datacentres, there is still a role for the channel. Although a client may see the economic benefit in renting infrastructure in the cloud, somebody still has to virtually build, maintain and integrate the cloud with the rest of the in-house IT infrastructure.

To give an analogy: if you decide to buy a house, you still need to change the locks, redecorate, maybe fit a new kitchen and keep the garden tidy. You could do it yourself if you have the skill or you could get a locks smith, painter and gardener to do it for you. These tradesmen are effectively the role for the channel in the infrastructure cloud utopia. In some cases, the end customer may well go directly to the channel partner who will act much in the way they do today as the trusted expert system integrator who in turn builds the requirement for the end client using resources from the various infrastructure cloud vendors.

The reality is that the infrastructure cloud providers won’t want to get involved in the individual requirements of each customer using their services. These low margin operators don’t have the feet on the ground to visit each customer and take on the processes of configuring, integrating and securing the virtual datacentre with the unique requirements of each client. These ‘coal face’ activities will be for the IT channel to deal with.

Platform Cloud (PaaS) / Development Cloud
This type of cloud is an environment for developers to create their own web-based applications. Again, the big fish in this pond are Amazon, Google AppEngine, Microsoft Azure and force.com. The advantages promised are extremely low capital expenditure as developers don’t need to get involved with all that messy hardware while scaling to meet user demand is made much easier. However, each vendor has a different architecture and a number of notable failures have put question marks over reliability.

Public, Private and Hybrids
So we have our three main types, software, infrastructure and platform. These clouds then fall into three distinct sub categories namely private clouds, public clouds and hybrid clouds.

A public cloud is a model where service provider makes resources, such as applications and storage, available to the general public over the Internet. Public cloud services may be free or offered on a pay-per-usage model. Examples of public clouds include Amazon Elastic Compute Cloud (EC2), IBM's Blue Cloud, Sun Cloud, Google AppEngine and Windows Azure Services Platform.

Private clouds, sometimes referred to as internal or corporate clouds, are computing architecture that provides services to a limited number of people behind a firewall. These types of clouds are often functionally the same as public clouds but target people concerns over privacy and data protection issues.

While a hybrid cloud, as the name implies, is mixture of private and public clouds. Some experts expect that within the enterprise, these types of mixed clouds will prevail. With some elements facing customers and partners while other more sensitive data is held is private silos for access only via the corporate intranet.

So what does it all mean for the channel?
Whether you believe that cloud computing will fulfil its potential and truly replace the entrenched IT industry is a debating point. What is clear to anybody that has used Google docs, a managed data backup service or even the pioneering saleforce.com, is that cloud computing does offer some compelling advantages.

The channel needs a strategy in place. It is no use putting your head in the sand and hoping cloud computing will just fizzle out – it won’t. When your client asks you, “So should we host this project in the cloud?” you need an answer or a viable solution if you hope to retain their confidence and business

A well known mobile telephony provider launched its services with the claim that the, “the future is bright. The future is Orange.” For the channel, the future is rather cloudy.